Do employers have a duty to pay their workers more than their marginal value products, profits be damned? Bernie Sanders defines a “living wage” as about $15/hr for someone who works 2,000 hrs per year, so $30,000/year. PPP-adjusted world product is $119.4 trillion per year.
Jason Brennan did the math and found that even if we could convert all of the world’s economic production into income and give it to everyone in equal amounts without disincentivizing productivity, PPP-adjusted income would become $16,100 per capita, only half of what Sanders envisions.
(Of course, the global labor force is smaller than the world population, at about 3.4 billion people, but their net wage would be similar if we assume they have to support the other 3.8 billion non-workers.)
In such a world, corporations, universities, and nonprofits couldn’t even exist, because we’re assuming that the total world output is converted into income and divided equally among all people. This puts an upper-bound on Sander’s proposal, but of course he could argue that we should just do it up to whatever the feasible level turns out to be. But still, I think it’s funny that in the idealized world where Sanders gets what he is asking for, the world collapses.
Two further questions for the people proposing a living wage:
1) If people are owed a morally sufficient (see “sufficientarianism”) income to live a happy or minimally decent life, why does this duty fall to their employers specifically instead of society at large?
2) What is the standard from which we get the specific minimum wage? Is it decided by historical standards? Global standards? National standards? Is it defined by the amount needed to live comfortably wherever you happen to already live, making it everyone else’s burdensome duty to help you enjoy some kind of right to live in an area well above your means?
If so, why should that be? Why do I owe a Los Angeles worker $X when he could live anywhere else? Am I his slave? (And if the luxury of a desirable location can be something I’m entitled to just because I already consume it and depend on it for happiness, why don’t tax payers have a duty to pay Jeff $1,000,000 every year to drive a Ferrari because he already has one on a lease and really really wants it?)
You might say, “because people have a right not to be separated from their families.” Okay, just add that to the thought experiment: imagine if my family made it a tradition to drive cars way above our means, and we wouldn’t be able to live happily as a family without our sports cars. Is the solution to change our overconsumption or to force other people to pay us to consume?
“But Sanders is only asking for it in the USA.”
The term “living wage” drips with morality. It implies that there’s some objective standard of living people are entitled to. Why would that entitlement vary by locale? Maybe there are places without the means to provide it, but does that make the people there less entitled to it?
It’s 9:00, and Anderson Cooper is signing off for the day after delivering a righteous rant about the coldheartedness of Republicans who enjoin the poor to adopt an ethic of personal responsibility and work their way out of poverty. He gets home, and is displeased to find his most frustrating nephew waiting for him at the door—Todd, who’s asking to crash on his couch.
He seems desperate, and Cooper asks him how this came to pass. Todd answers, “I’ve burned every bridge in my life, I’m being trailed by multiple child support obligations I’m putting off, I drank away my last three paychecks, and I find workaday jobs too unrewarding to keep.”
The CNN host exclaims, “Jesus, Todd. Why are you so damn irresponsible? Accept that these are the consequences of your actions and change your behavior. Don’t sponge off of me!”
If you wouldn’t let Todd crash on your couch, why would you let him crash on America’s couch?
This last libertarian line against wealth redistribution is best articulated by Bryan Caplan in his debate How Deserving are the Poor? He argues that if someone could have taken reasonable steps to avoid an outcome, they did not, and no one else was the primary cause of their needy situation, then they are primarily morally responsible for their situation.
He then appeals to the famous economic literature on the Success Sequence, which finds that avoiding chronic poverty in the developed world is, um, not very demanding. Finish high school, wait until marriage to have children, and hold down a job.
Supposing someone has more kids than they were prepared to care for, why should some random uninvolved party, Josh, be forced to bear the burden of his misjudgment? Is Josh Todd’s slave?